A vote on whether to request a 37 percent statewide increase on homes insured by Citizens Property Insurance Corp. was tabled Friday in Orlando by state’s insurer of last resort’s board of governors, which will reconsider the proposal in November.
The board approved a 6.8 percent surcharge on annual premiums for Citizens policyholders, an attempt to put the company on equal footing with customers of other insurance companies, who also had to pay the surcharge to pay off the $516 million deficit the company incurred last year from hurricanes.
Bruce Douglas, Citizen’s board chairman, said the company is cooperating in a criminal fraud investigation launched by Chief Financial Officer Tom Gallagher’s office into whether the company’s former CEO took bribes to steer business to adjusters.
R. Paul Hulsebusch resigned last Friday. A lawsuit in Texas filed by Universal Risk Insurance Services of Houston alleges that Hulsebusch, 39, accepted at least $25,000 in goods as a bribe from an adjuster who then won a contract to handle claims for Citizens.
Douglas said the company has retained a forensic auditing firm and an outside attorney for an internal investigation. “We will 100 percent be cooperative,” he said.
Board members said they were wary of how the new surcharge, plus another rate hike, might be perceived by consumers and proposed sending to customers and other insurance companies mailings explaining why they were taking such actions.
The rate proposal could have raised rates as much as 32.5 percent in Palm Beach County, 50 percent in Broward and 68 percent in Miami-Dade.
The proposed increase includes several plans to change how much Citizens charges to cover certain homes. Two suggestions the board will have to consider: Have Citizens charge as much as 20 percent higher premiums for customers whose homes are more than 40 years old, and tacking on larger increases for people whose homes are insured for more than $200,000, because many private companies also shy from insuring expensive homes.
Those percent increases would vary-as low as 0.1 percent for someone whose home is insured between $200,000 and $225,000, and as much as 16.2 percent for someone whose home is insured for more than $1 million.
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